UK housing market ended 2011 on a subdued note, RICS says

Date: Tuesday 10 Jan 2012

The Royal Institute of Chartered Surveyors housing market survey for the month of December shows that the UK housing market ended last year on a relatively subdued note. Nonetheless, there are reasons to expect an improvement, according to economists at Barclays Capital.

The headline net price balance edged up slightly, to -16 from -17 in November (Consensus: -19).

While still low by historical standards, this is the strongest reading since July 2010. However, price expectations slipped, with the balance falling to -24 from -22 in November.

Likewise, the net balance of respondents reporting growth in sales fell to 4 from 14, while the balance expecting future sales growth fell to 0 from 4. The sales expectations balance has now fallen significantly from October, when a net balance of 16% of surveyors expected sales to increase, Barclays adds.

London was again the only region to report house price growth over the previous three months or expectations of growth in the next quarter.

Commenting on the data after its release economists at Barclays Capital are indicating that, “The market is essentially flat at subdued levels, although the outlook has strengthened somewhat from the low ebb seen at the start of 2011. We forecast prices to remain broadly flat in the near term. However, we expect a gradual strengthening in real household income growth, notwithstanding some slippage in the labour market, will see the housing market outlook brighten over the course of the year, with prices and the volume of activity both increasing in the second half.”

AB

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